systematic efforts to collect data on the progress of the selected indicators, and

consequences, either rewards or sanctions for the contractor, that are based on performance.

Given the above, performance-based contracting seems to be fairly straight forward.

Unfortunately the world is anything but straight forward in terms of variables that can and do effect the original criteria upon which a performance-based contract is structured. In short, there are natural changes in buyer requirements and supplier capabilities that occur over the life of a contract that cannot be anticipated from the outset. This includes political, economic, social, technological and environmental changes. As a result, what were once a clear and useful set of objectives, is no longer applicable…